Using accounting with a manual method to track income and expenses may seem like an easy task, but there are simpler and more efficient ways to track your small business finances. This manual accounting method is great, but there are many other low-cost tools that can be used to not only track your finances easily but also process financial reports and provide analysis charts directly so that it makes it easy to get the insight you need.
Small Business Cash Flow Problems
Money in, and money out. In essence, the ability of small businesses to create value for stakeholders and potential investors is determined by your ability to generate positive cash flow, or more specifically, maximize long-term free cash flow.
Cash flow is very important to measure the health of your business. But how do you monitor it?
You might think of tracking sales on one hand and costs on the other, then comparing the two. However, as many as 65% of businesses fail to report that they are experiencing bankruptcy due to wrong handling of financial problems in the traditional way. What is one of the main problems? lack of cash flow visibility. This business doesn’t know (can’t see) if they produce less than they spend.
Why is it so easy to lose cash flow?
Sometimes it’s hard to understand why a business can go bankrupt, especially when you feel diligent about recording transactions. However, until you have your own business experience, you will not realize that tracking small business cash flow is really not as easy as it seems.
For example, you must:
a. Keep track of all expenditure receipts, which can sometimes be very difficult if more than one person makes a purchase.
b. Keep a record of all your sales revenue, including taking into account any discounts you might give.
c. Enter all cash flow financial records into the recording column manually, including conducting a double check to confirm all your data was entered correctly.
Often, you may have to turn to employees or business partners to provide this information, which means more time, patience and energy is spent following up on phone calls to get the financial statements you need.
Data Entry Slows You Down?
As your small business grows, the number of columns and rows in your accounting records also increases and is more complex, whereas on the other hand you must record these financial data as soon and accurately as possible. Plus the more you are busy developing a business so that you have limited time to manage business finances.
So what’s the solution?
Fortunately, there are currently many online accounting software such as Journals that you can use easily. What can be obtained from the Journal?
a. You can track and save all proof of transactions digitally through Snap Journal.
b. On the go, through the Mobile Journal application, you can track and monitor the current financial condition of the business anytime and anywhere.
c. You can create invoices and send them to customers professionally, and keep track of all the invoices that you send easily and quickly.
d. Perform reconciliation automatically with the bank to get a match of financial data that is in the bank and business transactions.
e. Make financial reports in just minutes and avoid mistakes in recording financial transactions.
f. You can also get payments faster with Pay Journal, so that your cash flow is maintained.